This is a rush transcript from "On the Record," January 11, 2010. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Tonight: Racist, or just really stupid? Either way, Senate Majority Leader Harry Reid really stepped in it this time. According to the new explosive book, "Game Change," Senate Majority Leader Reid said then Senator Obama would be a good presidential candidate because he's, quote, "light-skinned with no Negro dialect, unless he wants one."

Well, Senator Reid apologizing today.

(BEGIN VIDEO CLIP)

SEN. HARRY REID, D-NEV., MAJORITY LEADER: I've apologized to the president. I've apologized to everyone that is in the sound of my voice that I could have used a better choice of words. And I'll continue to do my work for the African-American community. As a very young man in the state of Nevada, I was one of the leaders of Civil Rights moving in Nevada, and it had a lot of moving to do. Governor O'Callaghan, he and I worked hard to work out the consent decree to allow integration of the gaming community in Nevada. Moving forward, I'm very aware of the fact that the first African-American to serve on the federal court in the state of Nevada was a direct -- work I did.

(END VIDEO CLIP)

VAN SUSTEREN: Joining us live is Byron York, chief political correspondent for The Washington Examiner. Byron, well, he certainly has gotten himself into a fix.

BYRON YORK, WASHINGTON EXAMINER: And he says he's not going to talk about it anymore. He says he's made his final statement on this. The key moment in this whole Reid affair happened Saturday afternoon, right after the news broke, because that was when the White House sent out a statement from President Obama saying that Senator Reid had made an unfortunate choice of words, but he's a good man and President Obama supports him, and he considers -- he, President Obama, considers the matter closed.

That sent a signal to Democrats everywhere, Defend Reid. They circled the wagons around him. Reid's fellow senators have defended him. The Congressional Black Caucus, which is, of course, mostly in the House, has defended him. And it's pretty clear that Democrats are not going to let Senator Reid go down because of this controversy.

VAN SUSTEREN: Well, who was insulted, so who should accept the apology? I mean, President Obama clearly was insulted by it. He -- I mean, he was the target of it, the express target of it. What about African-Americans in Nevada? I mean, the term that is used, "Negro," I mean, it's, like, where did that come from?

YORK: Well...

VAN SUSTEREN: I mean, that -- I mean, you know, you -- you have to go -- I mean, nobody -- I've never heard -- I mean, it's, like, bizarre. That's so out of the what, the '50s?

YORK: It was the 1958-ness of that it made it so weird. Now, President Obama even said he was the target, but he was being actually being complimented by Senator Reid, in Senator Reid's mind. It was saying...

VAN SUSTEREN: Which is even worse!

YORK: I mean...

VAN SUSTEREN: I mean, if -- if Senator Reid thinks that's a compliment, that's pretty...

YORK: Well, you know, Obama has dealt with this before with some of his fellow Democrats. Remember Joe Biden, whom Obama chose to be his running mate, in 2007 had praised Senator Obama as being, you remember, clean and articulate. So this is something that the president has encountered before from his fellow Democrats, and in this case especially, he really needs Harry Reid.

VAN SUSTEREN: How do we measure the goodness of a person? Is it by words or by his actions? Is it fair to sort of -- I mean, (INAUDIBLE) fair thing to do for Senator Reid is to actually go back -- I mean, he points out the many good things that he's done. Do we measure the goodness by his -- by his words or his deeds?

YORK: I think you measure by the prevailing standards that exist in our society today. It may not be fair, but a number of people have suffered terribly when they made racially insensitive remarks. Others not so much. Senator Robert Byrd, whose vote was very important in this health care vote, actually used the N-word on Fox, network television, twice in 2001. This is not the Ku Klux Klan a million years ago...

VAN SUSTEREN: Right.

YORK: ... this was in 2001. There are standards today, and Senator Reid clearly broke those.

VAN SUSTEREN: All right, the book is "Game Change." It talks about far more than what Senator Reid said. But the interesting thing is last night, "60 Minutes," CBS, had a segment -- a long segment on it, and a couple things. One is, is that there was absolutely nothing mentioned of Harry Reid.

YORK: Correct.

VAN SUSTEREN: And the thing that I've pointed out, at least on GretaWire, that I find so extraordinary is that in "60 Minutes," they spent the entire segment trashing two women, Palin and Clinton. There was no mention of Harry Reid. You'd think that the other people weren't even involved in the race, that there was no Senator McCain or President Obama, except to fill in to help trash the two women.

YORK: Part of this is history as told by the losers, I mean, because you have the losers...

VAN SUSTEREN: The book.

YORK: Yes. You have the -- not the authors, but the sources for this.

VAN SUSTEREN: Well, they wrote it.

YORK: The losers are sniping at each other after the campaign. And you saw long segments with Steve Schmidt, who ran the McCain campaign, trashing Sarah Palin. And Palin has shot back at various times. And you also heard anonymous staffers trashing Senator Clinton, saying that they at times sometimes worried if she was really qualified to be president or perhaps suited to be president and that she had a terrible temper and that she was presumptive. She was planning her transition before she'd even gotten close to winning the Democratic nomination. This is what happens in losing campaigns, people point fingers at each other and try to gain advantage.

VAN SUSTEREN: But here's the thing, though, that caught my (INAUDIBLE) because I went and looked at the Web site today that "60 Minutes" did, is the editorial decision for this big, fat book about an entire election was to trash the two women. They could have asked lots of questions about Harry Reid. They could have asked questions about Senator McCain, Biden, Vice President Biden or President Obama. But instead, the editorial control -- I looked up on the screen, I see three guys and I think, What a bunch of losers! If they could have accomplished as much as these two women did, and they're sitting around, trashing them.

YORK: Right. And it is ironic that the report did not mention at all what has since become the newsiest thing, which is Senator Reid's words, which he's had to apologize to, and the president himself has had to make a statement about.

VAN SUSTEREN: And of course, there's going to be a lot more that we're going to hear about this book in the days to come because it is -- it's unbelievable. Everyone's talking about it.

YORK: It's not over and...

VAN SUSTEREN: A lot of anonymous sources.

YORK: A lot of anonymous sources. And Democrats are still circling these wagons. You know, they were sending out e-mails today saying that some of the senators who -- Republicans who had criticized Senator Reid were hypocrites on the issue of race. We're seeing a lot of that still.

VAN SUSTEREN: Byron, thank you.

YORK: Thank you.

VAN SUSTEREN: Even before Reid's comments were exposed in this new book, Senator Reid was in deep, deep political trouble at home. And now the question that is the buzz of the nation: Is Senator Reid's reelection bid for 2010 on life support?

Joining us live is Ben Spillman, reporter for The Las Vegas Journal- Review (SIC). Ben, how's -- how's Senator Reid doing back home in this race for -- to be reelected?

BEN SPILLMAN, LAS VEGAS REVIEW-JOURNAL: Well, he's got an uphill battle ahead of him. He did before the remarks that came out over the weekend and he still does afterwards.

VAN SUSTEREN: When you talk about uphill battle, give me some idea how -- do you know what his poll numbers are, in terms of, you know, what - - what the people in Nevada are saying about him is favorable, unfavorable?

SPILLMAN: Well, his favorable rating is at about 33 percent. But the bigger issue is the unfavorable rating, which is at 52 percent. That's pretty high. And he has also has -- almost nobody -- he has a -- everybody recognizes him, so there are lot of people with fixed opinions, and that is, you know, harder to sway.

VAN SUSTEREN: All right, what's probably going to be on his -- I mean, it's going to -- everyone thinks of Senator Reid right now in terms of health care. How do the people in Nevada feel about the way he has been handling health care? Because he's in charge of it in the Senate.

SPILLMAN: Well, the health care support/oppose is 35 percent in support and 54 opposed, so it's almost similar to his favorable/unfavorable rating.

VAN SUSTEREN: How about his competition? Because even if the -- even if the people in Nevada aren't too happy with him, what's he competing with? That may define who's going to win.

SPILLMAN: Yes, his -- you know, he -- that's one of the issues that the Republicans are facing. There's something like nine or ten candidates that are vying to challenge him in the fall. The Review-Journal tested three of the candidates, Danny Tarkanian, Sue Lowden and Sharron Angle, against Senator Reid. And you know, it's really early, but each one of those polled better than Senator Reid in, you know, theoretical head-to- head match-ups.

VAN SUSTEREN: Is this trend -- I mean, are his numbers -- are they part of a downward trend, or is this where he's been hovering or is this an up -- or is he on his way up?

SPILLMAN: He's been hovering right around this level since at least August, and kind of on a broader macro level, since becoming more influential in party leadership. You know, that has -- seems to be -- maybe that was a turning point because his opponents are always, you know, trying to tie him to Nancy Pelosi or Barack Obama or whatever Democratic issue is unpopular at the time.

VAN SUSTEREN: I realize you haven't polled him since -- polled since these comments came out about President Obama, but do you have any sort of sense from e-mails you've gotten, talking to people on the street, sort of, you know, what has been sort of the public reaction, if they think it's just -- Well, you know, we'll look at his history and see what he's done, or are these words going to really hurt him in November?

SPILLMAN: Well, it's really hard to say. You know, the -- I guess what you would call the political class of people, people who really follow this closely, this is, you know, a huge topic of conversation for them. But you know, the average Nevadan probably isn't thinking that much about the election right now, and this is -- there's going to be so many things that happen between now and November, it's hard to say that they're going to be thinking about this then, especially with the economy, jobs. You know, that's probably much more important to Senator Reid, or really any incumbent politician, is what's the economy going to be like, you know, what, 11 months from now, 10 months from now.

VAN SUSTEREN: With the bleak job situation in Nevada, and your state is one of the worst situations, is there some -- any reaction to the great deal that Senator Be Nelson got for his state, from your senator? That $300 million is burning a lot of people across the country. Are they talking about it in Nevada or not?

SPILLMAN: Yes, they're talking about it. I mean, it's something -- his opponents, his political opponents are definitely bringing that up at every single opportunity they can. And you know, we get calls and e-mails. That's one of the things that -- you know, this health care issue is -- it's a really complex issue. It's really big. It's hard for people to wrap their heads around. But that -- any time something like the Nelson thing comes up, where there's a little piece of it that people can really grasp onto -- that seems to be what the politicians do, too, whether they're for it or against it. And you know, they'll ride it as far as they can.

VAN SUSTEREN: How about the stimulus bill from February? People in Nevada like that bill or not? Because that's another thing that's going to be pinned to Senator Reid.

SPILLMAN: Well, I think it all depends on how directly they feel it's affecting them. You know, if you're out of work, or you know, you -- well, yes if you are out of work, you're looking for a job, you might not feel that it's helping you, it's doing anything. If you are employed, conversely, you might be more apt to, you know, be open-minded to the suggestion that without that, things could be much worse. You know, the "Things could be much worse" argument would probably resonate better with people who are still employed.

VAN SUSTEREN: Ben, thank you. And of course, all eyes in the nation will be watching your state for the next seven or eight months. Thank you, Ben.

SPILLMAN: Great. Thank you.

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